PROPERTY RIGHTS: TANGIBLE AND INTANGIBLE
All libertarians favor property rights, and agree that property rights include rights in tangible resources. These resources include immovables (realty) such as land and houses, and movables such as chairs, clubs, cars, and clocks.1 Further, all libertarians support rights in one’s own body. Such rights may be called “self-ownership” as long as one keeps in mind that there is dispute about whether such body-ownership is alie nable in the same way that rights in homesteadable, external objects are

* General Counsel and Vice President for Intellectual Property with A pplied Optoelectronics, Inc., in Sugar Land, Texas, and Book Review Editor of The Journal of Libertarian Studies.

The author thanks Wendy McElroy and Gene Callahan for helpful comments on an earlier draft. The views expressed herein are those of the author alone, and should not be attributed to any other person or entity. An earlier version of this article was presented at the Austrian Scholars Conference, Auburn, Alabama, March 25, 2000. A condensed version of some of the arguments in this article may be found in N. Stephan Kin­ sella, “In Defense of Napster and Against the Second Homesteading Rule,” http://www.lewrockwell.com/orig/kinsella2.html, September 4, 2000. Con­ tact the author at kinsella@swbell.net. Terms like “realty,” “personalty,” and “tangible” are common-law terms; analogous civil-law terms are “immovables,” “movables,” and “corpore­ als,” respectively. See N. Stephan Kinsella, “A Civil Law to Common Law Dictionary,” Louisiana Law Review 54 (1994), pp. 1265–305 for further differences between civil-law and common-law terminology. The term “things” is a broad civil-law concept that refers to all types of items, whe­ ther corporeal or incorporeal, movable or immovable.
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Journal of Libertarian Studies alienable.2 In any event, libertarians universally hold that all tangible scarce resources—whether homesteadable or created, immovable or movable, or our very bodies—are subject to rightful control, or “ownership,” by specified individuals. As we move away from the tangible (corporeal) toward the in­ tangible, matters become fuzzier. Rights to reputations (defamation laws) and against blackmail, for example, are rights in very intan­ gible types of things. Most, though not all, libertarians oppose laws against blackmail, and many oppose the idea of a right to one’s reputation.3 Also disputed is the concept of intellectual property (herein re­ ferred to as IP). Are there individual rights to one’s intellectual crea­ tions, such as inventions or written works? Should the legal system
Debate over this issue manifests itself in differences over the issue of in­ alienability and with respect to the law of contract, i.e., can we “sell” or alienate our bodies in the same manner that we can alienate title to home­ steaded property? For arguments against body inalienability, see N. Steph­ an Kinsella, “A Theory of Contracts: Binding Promises, Title Transfer, and Inalienability” (paper presented at the Austrian Scholars Confe rence, Auburn, Alabama, April 1999); and N. Stephan Kinsella, “Inalienability and Punishment: A Reply to George Smith,” Journal of Libertarian Stud­ ies 14, no. 1 (Winter 1998–99), pp. 79–93. For arg uments favoring such alienability, see Walter Block, “Toward a Libertarian Theory of Inaliena­ bility: A Critique of Rothbard, Barnett, Gordon, Smith, Kinsella, and Ep­ stein,” Journal of Libertarian Studies (forthcoming). 3 For views in opposition to blackmail laws, see Walter Block, “Toward a Libertarian Theory of Blackmail,” Journal of Libertarian Studies 15, no. 2 (Spring 2001); Walter Block, “A Libertarian Theory of Bla ckmail,” Irish Jurist 33 (1998), pp. 280–310; Walter Block, Defending the Undefendable (New York: Fleet Press, 1976), pp. 53–54; Murray N. Rothbard, The Ethics of Liberty (New York: New York University Press, 1998), pp. 124–26; and Eric Mack, “In Defense of Blackmail,” Philosophical Studies 41 (1982), p. 274. For libertarian views in favor of blackmail laws, see Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974), pp. 85–86; and Richard Epstein, “Blackmail, Inc.,” University of Chicago Law Re­ view 50 (1983), p. 553. For libertarian arguments against defamation (libel and slander) laws, see Block, Defending the Undefendable, pp. 50–53; and Rothbard, The Ethics of Liberty, pp. 126–28; in favor, see David Kelley in David Kelley vs. Nat Hentoff: Libel Laws: Pro and Con, audiotape (Free Press Associ­ ation, Liberty Audio, 1987).
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N. Stephan Kinsella – Against Intellectual Property protect such rights? Below, I summarize current U.S. law on intel­ lectual property rights. I then survey various libertarian views on IP rights, and present what I consider to be the proper view.

Journal of Libertarian Studies Copyright Copyright is a right given to authors of “original works,” such as books, articles, movies, and computer programs. Copyright gives the exclusive right to reproduce the work, prepare derivative works, or to perform or present the work publicly. 8 Copyrights protect only the form or expression of ideas, not the underlying ideas themselves.9 While a copyright may be registered to obtain legal advantages, a copyright need not be registered to exist. Rather, a copyright comes into existence automatically the moment the work is “fixed” in a “tan­ gible medium of expression,” and lasts for the life of the author plus seventy years, or for a total of ninety-five years in cases in which the employer owns the copyright.10 Patent A patent is a property right in inventions, that is, in devices or processes that perform a “useful” function. 11 A new or improved mousetrap is an example of a type of device which may be patented. A patent effectively grants the inventor a limited monopoly on the manufacture, use, or sale of the invention. However, a patent actu­ ally only grants to the patentee the right to exclude (i.e., to prevent others from practicing the patented invention); it does not actually grant to the patentee the right to use the patented invention.12
brochures, and pamphlets are available from the United States Copyright Office, http://lcweb.loc.gov/copyright, and from the Patent and Trademark Office of the Department of Commerce, http://www.uspto.gov. Other use­ ful sites are listed in this article’s appendix and bibliography. 8 17 USC §§ 101, 106 et pass. 9 Modern copyright law has superseded and largely preempted “common law copyright,” which attached automatically from the moment of a work’s creation, and which essentially conferred only a right of first publication. Goldstein, Copyright, §§ 15.4 et seq. 10 17 USC § 302. Due to recent legislation, these terms are 20 years longer than under previous law. See HR 2589, the Sonny Bono Copyright Term Extension Act/Fairness in Music Licensing Act of 1998. 11 35 USC § 1 et seq.; 37 CFR Part 1. 12 Suppose A invents and patents a better mousetrap, which has a Nitinol (memory metal) spring for better snapping ability. Now suppose B invents and patents a mousetrap with a Nitinol spring covered with non-stick coat­ ing, to improve the ability to remove mouse remains while still providing

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N. Stephan Kinsella – Against Intellectual Property Not every innovation or discovery is patentable. The U.S. Su­ preme Court has, for example, identified three categories of subject matter that are unpatentable, namely “laws of nature, natural phe­ nomena, and abstract ideas.”13 Reducing abstract ideas to some type of “practical application,” i.e., “a useful, concrete and tangible result,” 14 is patentable, however. U.S. patents, since June 8, 1995, last from the date of issuance until twenty years from the original filing date of the patent application15 (the previous term was seventeen years from date of issue). Trade Secret A trade secret consists of any confidential formula, device, or piece of information which gives its holder a competitive advantage so long as it remains secret.16 An example would be the formula for Coca-Cola ®. Trade secrets can include information that is not novel enough to be subject to patent protection, or not original enough to be protected by copyright (e.g., a database of seismic data or customer lists). Trade secret laws are used to prevent “misappropriations” of the trade secret, or to award damages for such misappropriations.17 Trade secrets are protected under state law, although recent federal law has been enacted to prevent theft of trade secrets.18

the Nitinol-driven snapping action. B has to have a mousetrap with a Nit­ inol spring in order to use his invention, but this would infringe upon A’s patent. Similarly, A cannot add the non-stick coating to his own invention without infringing upon B’s improvement patent. In such situations, the two patentees may cross-license, so that A can practice B’s improvement to the mousetrap, and so B can use his own invention. 13 Diamond v Diehr, 450 US 175, 185 (1981); see also 35 USC § 101.
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such as the mask work protection available for semiconductor in­ tegrated circuit (IC) designs. e. 15 USC §§ 1125(c). e. or collections of information. the Coca-Cola ® mark and the design that appears on their soft drink cans identifies them as pro­ ducts of that company. S1948. HR 3194. 24 See. for boat hull designs. 1127.. The term of a federal trademark registration lasts ten years.Journal of Libertarian Studies Trade secret protection is obtained by declaring that the details of a subject are secret. or design used to identify the source of goods or services sold.23 and the proposed sui generis right in databases. Anticybersquatting Consumer Protection Act.21 and various “unfair competition” claims. 21 15 USC § 1125(d). similar to copyright. PL 106–113 (1999). HR 354 (introduced 1/19/1999). The trade secret theoretically may last indefi­ nitely. IP also includes recent legal innovations. and
20 19
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. or independent in­ vention may destroy it. “Copyright. symbol. 37 CFR Part 2. Trademark A trademark is a word. 24
15 USC § 1501 et seq. i. Trademark law primarily prevents competitors from “in­ fringing” upon the trademark. Collections of Information Antipiracy Act.19 Other rights related to trademark protection include rights against trademark dilution. and to distinguish them from the goods or services of others. phrase.. See also Jane C. using “confusingly similar” marks to identify their own goods and services.e. Trade secrets can protect secret information and processes. 23 See 17 USC § 1301 et seq. 22 See 17 USC § 901 et seq. reverse-engineering.g. compilations of data and maps not protectable by copyright. Common Law.20 certain forms of cybersquatting. although disclosure.. One disad­ vantage of relying on trade secret protection is that a competitor who independently invents the subject of another’s trade secret can ob­ tain a patent on the device or process and actually prevent the origi­ nal inventor (the trade secret holder) from using the invention. and can also be used to protect software source code not disclosed and not otherwise protectable by patent. Ginsburg.22 the sui generis protection. For example. Unlike copyrights and pat­ ents. trademark rights can last indefinitely if the owner continues to use the mark.g. with ten-year renewal terms being available. distinguishing them from competitors such as Pepsi®..

She also confusingly attacks the strict antitrust scru­ tiny given to patent holders.N. It is widely. 63 S. it is not unjust to use an anti-monopoly law to limit the abi­ lity of a patent owner to extend this monopoly beyond the bounds intended by the patent statute. and often confuse copyrights. 1. including libertarians.. Kewanee Oil Co. 317 US
111.. The problem with antitrust laws is in their applic ation to normal.27 State trademarks still exist since they have not been completely preempted by federal law. not federal. p. clause 3. unlike most other countries.” Uni­ versity of Cincinnati Law Review 66 (1997). 127. However. trademarks. 151. p. not to limit real—i. law. the U. v.Ct. 82 (1942).03. Trade secrets are generally protected under state. have a poor understanding of IP concepts and law. such as ownership of patents. § 22. by contrast.e. 17 USC §§ 101.. system.
28 But see the federal Economic Espionage Act of 1996. Wickard v Filburn . 29
Sui Generis Protection of Databases in the United States and Abroad. and Chisum on Patents. and incorrectly. Constitution. Friedman. are based on the interstate commerce clause and thus only covers marks for goods and services in interstate commerce. 26 See Paul C. since the Constitution grants Congress the power “to promote the progress of science and useful arts. “Employer’s Rights to Inventions and Patents of Its Officers. p.” in Capitalism: The Unknown Ideal (New York: New American Li­ brary. peaceful business dealings.”25 De­ spite the federal source of patents and copyrights. 1879. which do have a “first-to-file” system for priority. 8. system is actually a “first-to-invent” system. believed that in the U. See Ayn Rand. 1885 (1974). 415 US 470. federal law almost exclusively governs copyrights and patents.
29 Ayn Rand mistakenly assumes that the first to file has priority (and then she is at pains to defend such a system). since patents are government-granted monopolies. Cons.28 Many laymen. A similar point might be m ade with regard to Bill
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.S. Bicron Corp. However. 479. and patents. 133.26 Federal trademarks. which nevertheless tend to be fairly uniform from state to state. 1967). Ct. art. 18 USC §§ 1831–39. are based on state law. Directors. various related aspects. 201.S. § 8.” AIPLA Quarterly Journal 18 (1990). Art I. 94 S. van Slyke and Mark M. sec. but federal marks tend to be more commercially im­ portant and powerful. not being explicitly authorized in the Con­ stitution. and Employees. “Patents and Copy­ rights. 27 U.S. the inventor who files first at the patent office has priority over those who file later. Stephan Kinsella – Against Intellectual Property In the United States. governmentgranted—monopolies. 25 U.S.

as discussed
Gates. and doubtlessly does not oppose the legitimacy of antitrust laws.. Most of the debate about IP concerns patent and copyright.
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.” If he sells a physical copy of the novel to B. inventors. of which the book is but one example. to every book within the jurisdiction of the legal system that recognizes the copyright. It is important to point out that ownership of an idea. at least. may be considered rights in ideal objects. Moreover. if A writes a novel. “copyright”). he has a copyright in this “work. B does not own the “novel” itself. even if B owns the material property of paper and printing press. or. Consider a copyrighted book. effectively gives the IP owners a property right in every physical embodiment of that work or invention.Journal of Libertarian Studies
IP Rights and Relation to Tangible Property
As noted above. A’s ownership of a patent gives him the right to pre­ vent a third party from using or practicing the patented invention. one can hardly wring one’s hands in pity over his having to lie in the very bed he helped make. then B owns only that one physical copy of the novel. therefore. Patent and copyright invariably transfer partial ownership of tangible property from its natural owner to innovators. as Bill Gates is no libertarian. a right in every physical version of the book. and is not entitled to make a copy of the novel. Copyright holder A has a right to the underlying ideal object. Thus. or ideal object. IP rights. to outright opposition to IP rights. Thus. The copyright system gives A the right in the very pattern of words in the book. Only A has the right to copy the book (hence. A’s ownership of ideal rights gives him some degree of control—ownership—over the tangible property of innumerable others. A has a right to every tangible instantiation or embodiment of the book—i. even using his own paper and ink. Likewise. at least for patents and copyrights. and artists. in book form. In this way. even if the third party only uses his own property. by implication. he cannot use his own property to create another copy of A’s book.e. whose fortune has largely been built based on the government­ granted monopoly inherent in copyright.
LIBERTARIAN PERSPECTIVES ON IP
The Spectrum
Libertarian views on IP range from complete support of the full­ est gamut of IP imaginable.

creations of the mind are entitled to protection just as tan­ gible property is. “Are Patents and Copyrights Morally Justified?” pp. its fruits. a sculpture. Staaf. Friedman. Law’s Order: What Economics Has to Do with Law and Why it Matters (Princeton.” There are also utilitarian pro-IP arguments. Friedman.htm. p. Posner. just as one has a right to the crops one plants. p. because they result from other things he “owns. § 3. 11. pp. 819.: Liberty Press. “Intellectual Property: Copyright and Patent.Journal of Libertarian Studies According to the natural-rights view of IP held by some liber­ tarians. vol. a song.” http://www.34 Among libertarians. Roger E. N.J. Both are the product of one’s la bor and one’s mind.
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. Because one owns one’s labor.” University of Dayton Law Review 19. p. (Boston: Little.zetetics. one has a
natural law right to the fruit of one’s labor.com/mac/intpro2. 867. 1978). 1974). “Standards As Intellectual Property: An Economic Approach. Ejan Mackaay also advocates IP on utilitarian grounds. 818. no.35 a utilitarian institutional framework. “The Economic Theory Concerning Patents for Inventions.3. zetetics. p.” Harvard Journal of Law & Public Policy 13. 38–45.” in “Symposium: Intellectual Property. pp. “Are Patents and Copyrights Mora lly Justified?” p. reprint. Indianapolis. Earlier utilitarian advocates of IP include John Stuart Mill and Jeremy Bentham. including intellectual “creations. anarchist David Friedman analyzes and appears to endorse IP on “law-and-economics” grounds. 2000). and Trademarks: Property or Monopoly?” in “Symposium: Intellectual Property.” An individual creates a sonnet. 3 (Spring 1994). and David D. See also Wendy McElroy. 44.com/mac/intpro1. 911. Meiners and Robert J. chap.: Princeton Un iversity Press. 33 Palmer. 1109–29. Economic Analysis of Law.” in Selected Economic Essays and Addresses (London: Routledge & Kegan Paul. part IV. See Arnold Plant. 34 Richard A. Under this view. 3. so one has a right to the ideas one generates and the art one produces. “Patents. chap. 35 David D. and therefore. 2 (1893. in “Economic Incentives in Markets for Information and Inno­ vation. He is thus entitled to “own” these creations. 3. 13. The utilitarian argument pre­ supposes that we should choose laws and policies that maximize
Principles of Ethics. 1992). no.33
This theory depends on the notion that one owns one’s body and labor. Brown. 825. 121. Copyrights. no.htm and http://www. by employing his own labor and body.” Harvard Journal of Law & Public Policy 13. Ind. and Palmer. 4th ed. Federal Judge Ric h­ ard Posner is one prominent utilitarian (although not libertarian) IP advocate.

But even if stealing some of A’s property and giving it to B increases B’s welfare “more” than it diminishes A’s (if such a comparison could. For ex­ ample. one could argue that net utility is enhanced by redistribut­ ing half of the wealth of society’s richest one percent to its poorest ten percent.Journal of Libertarian Studies vigorously opposed IP in a debate in the nineteenth century individualist-anarchist periodical Liberty . this does not establish that the theft of A’s property is justified. p. 828–29. “Justice is the constant and perpetual wis h to render every one his due. “Copy Catfight: How Intellectual Prop­ erty Laws Stifle Popular Culture. 39 Acccording to Justinian. rather. But there are three fundamental problems with justifying any right or law on strictly utilitarian grounds.39 Even if overall wealth is increased due to IP laws. let us suppose that wealth or utility could be maximized by adopting certain legal rules. 1975). the goal is justice—giving each man his due.” The Institutes of Justin­ ian: Text. chap. First. See Palmer. 3rd rev. and Jesse Walker. 1343. . 818. to hurt no one.
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. “Are Patents and Copyrights Morally Justified?” pp.” Reason (March 2000). to give every one his due. trans. pp. J. Ludwig von Mises expressed no opinion on the issue. .
Utilitarian Defenses of IP
Advocates of IP often justify it on utilitarian grounds. merely drawing the economic implications from the presence or absence of such laws. Wealth maximization is not the goal of law.38 These commentators point out the many problems with conventional utilitarian and natural-rights arguments given to justify IP rights. . section 6. Utilitar­ ians hold that the “end” of encouraging more innovation and creativ­ ity justifies the seemingly immoral “means” of restricting the free­ dom of individuals to use their physical property as they see fit. somehow. Even then. ed. Translation. These and other shortcomings of standard pro-IP arguments are surveyed below. The maxims of law are these: to live hon­ estly.C. 23.
(1989). 661–62. “Intelle ctual Property: Copyright and Patent. (Chicago: Henry Regnery.” Also strongly opposed to IP was the nineteenth-century Jacksonian editorialist William Leggett. 1966). 38 McElroy. and Commentary. Thomas (Amster­ dam: North-Holland. be made). this does not show that these rules are justified.A. See Human Action. the “size of the pie” is increased. it does not follow that this allegedly desirable result justifies the unethical violation of some individuals’ rights to use their own property as they see fit.

42 It is debatable whether copyrights and
On the d efects of utilitarianism and interpersonal utility comparisons. p. 149–51. Batson (1912. “In Defense of E x­ treme Rationalism: Thoughts on Donald McCloskey’s The Rhetoric of Eco­ nomics. 1997). Ala. trans.K.” in The Theory of Money and Credit. 99.E. “In Defense of Extreme Rationalism. Against Politics: On Government. J.” Review of Austrian Economics 3 (1989). see Cole. utilitarianism is not coherent. ed.” in The Logic of Action One (Cheltenham. this question of measurement cannot arise. the price does not serve as a measure of the good’s value. esp. 1997). Human Action. “Praxeology. 96. Indianapolis. Kahane (Indianapolis. the notion is entirely fallacious. even if we set aside the problems of interpersonal util­ ity comparisons and the justice of redistribution and we plow ahead. U. Anthony de Jasay. Ludwig von Mises. On scientism and empiricism.: Liberty Press. 81–82. reprint. “The Mantle of Science. Money does not measure value. p. Hans-Hermann Hoppe. 3rd rev. and Order (London: Routledge. Rothbard. George Reisman (New York: New York University Press.40 But not all values have a market price. Economic Science and the Austrian Method (Auburn. 1980). “Patents and Copyrights: Do the Benefits
40
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. 1962). So long as the subje ctive theory of value is accepted.” Ludwig von Mises.: Edward Elgar. trans.” 41 Mises states: “Although it is usual to speak of money as a measure of value and prices. 210. (Kansas City: Sheed Andrews and McMeel. 92.” in The Logic of Action One. The Ultimate Foundation of Economic Science: An Essay on Method. see Rothbard. Hans-Hermann Hoppe. 204.41 Finally. Socialism: An Economic and Sociological Anal­ ysis. 2nd ed. 51. Anarchy. 122. Mises showed that even for goods that have a market price.” “On the Measurement of Value. Ind.. Nor are prices measured in money: they are amounts of money.” in The Logic of Action One. Value Judgments. Ind. 217. Als o: “Money is neither a yardstick of value nor of prices. in fact. it is not at all clear that IP laws lead to any change—either an increase or a decrease—in overall wealth. see also Mises. 144. and 289. 90–99. 1981). trans. pp. Epistemo­ logical Problems of Economics. Stephan Kinsella – Against Intellectual Property In addition to ethical problems.: Liberty Fund. It necessarily involves making illegitimate interpersonal utility compar­ isons. 1995). p. 179. pp. “Toward a Reconstruction of Utility and Welfare Ec o­ nomics. 1981). employing standard utilitarian measurement techniques. H. see Murray N. see Ludwig von Mises.N. and Public Policy. as when the “costs” of IP laws are subtracted from the “bene­ fits” to determine whether such laws are a net benefit. On epistemological dualism.: Ludwig von Mises Institute. Rothbard. none of them do. pp. 98. 42 For an excellent survey and critique of the cost-benefit justification for patent and copyright. and Hoppe.

Research expenditures are therefore overstimulated in the early stages before anyone has a patent. 30–51. “What is Property?” pp. In addition. Palmer. while others are not. 850–51. pp. It is possible that companies would have an even greater incentive to innovate if they could not rely on a near twenty-year monopoly. and they are unduly restricted in the period after the patent is received. This large overhead would be unnecessary if there were no patents.Journal of Libertarian Studies patents really are necessary to encourage the production of creative works and inventions. The pat­ ent system then has the further effect of artificially stimulating research expenditures in the patentable areas.” Eco­ nomica 1 (1934). Leonard Prusak. “The Economic Theory Concerning Patents for Inventions. “Patents and Copyrights: Do the Benefits Exceed the Costs?” for further examples of costs of patent and copyright laws. while artificially restricting research in the nonpatentable areas. 43 There are undoubtedly costs of the patent system. but not for more abstract or theoretical ideas. pp. This skews resources away from theoretical R&D. 820–21. see Palmer. 812–13. “The Economic Theory Concerning Patents and Inventions. See also Rothbard. Bouckaert. “Intellectual Property: A Non-Posnerian Law and Economics Ap­ proach. compa­ nies would not spend money obtaining or d efending against such ridiculous patents as those in the Appendix.” p. for example. Additionally.” pp. But should not those who
Exceed the Costs?” For useful discussions of evidence in this regard. 300–2. “Are Patents and Copyrights Morally Justi­ fied?” pp. some inventions are considered patentable. or that the incremental gains in innovation out­ weigh the immense costs of an IP system. . . 44 Plant. But certainly patents distort the type of research expenditure being conducted. many inventions are pat­ ented for defensive reasons. .44 It is not clear that society is better off with relatively more practical invention and relatively less theoretical research and development. Econometric studies do not conclusively show net gains in wealth. and Leonard Prusak. 50–59. It simply has not been shown that IP leads to net gains in wealth. pat­ ents can be obtained only for “practical” applic ations of ideas. “Does the Patent System Have Measurable Ec onomic Value?” AIPLA Quarterly Journal 10 (1982). pp. Economy. In the absence of patent laws. Perhaps there would even be more innovation if there were no patent laws. resulting in patent la wyers’ salaries and patent office fees. Man.”
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. 658–59: “It is by no means self-evident that patents encourage an increased absolute quantity of research expenditures. 43. maybe more money for research and development (R&D) would be available if it were not being spent on patents and lawsuits. As noted. and State. 43 See Cole.

Some Problems with Natural Rights
Other libertarian proponents of IP argue that certain ideas de­ serve protection as property rights because they are created. For these reasons.”45 For Rand. Rand agrees with this disparate treatment. every single useful idea one comes up with is subject to ownership (more on this below). For example. in attempting to distinguish between an unpatentable discovery and a patentable invention. in a sense. It is only fair that a creator reap the benefits of others using his creation. To ask whether a law should be enacted or exist is to ask: is it proper to use force against certain people in certain circumstances? It is no wonder that this question is not really addressed by analysis of wealth maximization. For this reason. Utilitarian analysis is thoroughly confused and bankrupt: talk about increasing the size of the pie is methodologically flawed. pie growth does not justify the use of force against the otherwise legitimate property of others. in part. patents can be obtained only for so-called “practical applic ations” of ideas.
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. Stephan Kinsella – Against Intellectual Property advocate the use of force against others’ property have to satisfy a burden of proof? We must remember that when we advocate certain rights and laws. philosophical or mathematical or scientific truths cannot be protected under cur­ rent law on the grounds that commerce and social intercourse would grind to a halt were every new phrase. One problem with the creation-based approach is that it almost invariably protects only certain types of creations—unless. She argues
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Rand. and inquire into their legitimacy.N. philosophical truth. we are inquiring into the le­ gitimacy and ethics of the use of force. that is. IP rights are. Further. 130. But the distinction between the protectable and the unprotectable is necessarily arbitrary. For this reason. the reward for produc­ tive work. Rand supported patents and copyrights as “the legal implementation of the base of all property rights: a man’s right to the product of his mind. unborn heirs of the original creator are not themselves responsible for the creation of their an­ cestors’ work. but not for more abstract or theoretical ideas. utilitarian IP defenses are unpersuasive. she opposes perpetual patent and copyright—because future. there is no clear evi­ dence that the pie increases with IP rights.” p. “Patents and Copyrights. and the like considered the exclusive property of its creator.

Ct. 47 But it is arbitrary and unfair to reward more practical
46
Plant is correct in stating that “[t]he task of distinguishing a scientific dis­ covery from its practical application. They merely re­ arrange matter into new arrangements and patterns. e. once known by others. In this sense. See. Yet the mousetrap merely follows laws of nature. Recent case law has ex­ panded the types of mathematical and computer algorithms and business methods that can be protected by patent. Others who learn of this new arrangement can now also make an improved mousetrap. Perhaps this is because patent law has no moorings to objective borders of actual.” pp. a principle or a fact of reality not previously known” is not created by the discoverer. one would think that Objectivists —ardent. 33 USPQ2d 1194 (Fed Cir 1994). new ideas.46 Nor is it clear why such a distinction.. For the latter reason alone. is ethically relevant in defining property rights. amorphous. 49–50. Without Einstein’s. 825 (1892).Journal of Libertarian Studies that a “scientific or philosophical discovery. No one creates mat­ ter. 145 US 156. 171. self-proclaimed defenders of objectivity and opponents of subjectivism—would oppose patent and copyright. 12 S.” Topliff v Topliff. others would have been ignorant of certain causal laws. 47 In re Trovato. they just manipulate and grapple with it according to physical laws. Similarly. Supreme Court has noted that “[t]he specification and claims of a patent . is often baffling to the most subtle lawyer. and thus is inherently vague. State Street Bank & Trust
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. the in­ ventor of a new way to calculate a number representing the shortest path between two points—an extremely useful technique—was not given patent protection because this was “merely” a mathematical algorithm. no one really creates anything. allows them to manipulate matter in a more effi­ cient way. the U. and subjective. . efforts. . tangi­ ble property. Einstein’s “discovery” of the relation E=mc 2 . nor the facts and laws exploited to make it work. which may be patentable . On a related note. . consti­ tute one of the most difficult legal instruments to draw with accuracy. But the distinction between creation and discovery is not clear­ cut or rigorous. Both the inventor and the theoretical sci­ entist engage in creative mental effort to produce useful. The inventor did not in­ vent the matter out of which the mousetrap is made. An engineer who invents a new mousetrap has rearranged existing parts to provide a function not previously performed. .g.S. or the inventor’s.” “The Economic Theory Concerning Patents for Inventions. ambiguous. In one recent case. of ways matter can be manipulated and utilized. and the other is not. even if clear. which identifies a law of nature. Yet one is rewarded.

49 Galambos believed that man has property rights in his own
Co. any more than the current price for a gallon of milk can be objectively classified as too low or too high. Soulé.html.tuspco. one way to avoid this difficulty is to claim that eve­ rything is protectable by IP. “Are Patents and Copyrights Morally Justified?” pp. 818. border on the absurd. whose ideas. pp. and unjust. No one can seriously maintain that nineteen years for a pat­ ent is too short. and concern­ ing the length of the term of the protection. or observed in. one problem with the natural-rights approach to validat­ ing IP is that it necessarily involves arbitrary distinctions with re­ spect to what classes of creations deserve protection. material substances. and twenty-one years too long. v Signature Financial Group. “The Law of Intellectual Property”. 48 Spooner. Palmer. “Intellectual Property: Copyright and Patent”. 69–71]). also requires arbitrary rules. for seventy years past the author’s death. The owner of a lo­ gos would own the order or pattern of information imposed upon.. 825. Stephan Kinsella – Against Intellectual Property inventors and entertainment providers. The Theory of Volition.” patent law still necessarily makes a distinction between the two. with perpetual (infinite) terms. 149 F3d 1368 (Fed Cir 1998). Jr. vol. while copyrights last. The most radical of all IP proponents is Andrew Joseph Galam­ bos. The distinction is inherently vague. “What Is Volitional Science?” http://www. to the extent that I understand them. Evan R. patents last for twenty years from the filing date. as opposed to a perpetual right. adopting a limited term for IP rights. The logos is the “material identity” or identity-pattern of created things.com/html/what_is_v-50_. McElroy. Schulman advocates a much broader concept of creations or ideas protectable by IP. in the case of individual authors. For example. Spoon­ er. I have read only sketchy accounts of Galambos’s theories. Of course. such as the engineer and song­ writer. advocated perpetual rights for patent and copy­ right. Thus.N. However. arbitrary.48 for example. Moreover. live Galambosian once.
17
. 49 See Galambos. 1. no matter where the line is drawn between unpatentable “laws of nature” and “abstract ideas” and patentable “practical applications. I also met a real. He argues for property rights called “logo­ rights” in any “logos” that one creates. and to leave more theoretical science and math researchers and philosophers unrewarded. much to my surprise (I had supposed that they were fic­ tional creations of Tuccille [It Usually Begins with Ayn Rand.

52. having the same type of dilemma. to avoid infringing his identically-named father’s rights to the name. and changing his original name from Joseph Andrew Galambos (Jr. 52.” Secondary derivatives.”51 Can we really believe that there were no property rights respected before the 1800s. the alleged “inventor” of the word “liberty”. Of course. when pat­ ent rights became systematized?) Galambos reportedly took his own ideas to ridiculous lengths. 50 Friedman. Thus. “The Ba­ sics of Economic Government. “Patents and Copyrights. p. No one would even be able to build
at a Mises Institute conference a few years ago. “In Defense of Private Orderings.Journal of Libertarian Studies life (primordial property) and in all “non-procreative derivatives of his life. I suppose that any Galambosian other than Galambos himself.. subsequent generations would be choked by ever-growing restraints on their own use of property. No one would be able to manufacture—or even use—a light bulb without getting permission from Edison’s heirs. It Usually Begins with Ayn Rand. televi­ sions. and by lengthening its duration to avoid making such arbitrary distinctions as Rand does. property rights in tangible items are relegated to lowly sec­ ondary status.52 dropping a nickel in a fund box every time he used the word “liberty. (Even Rand once elevated patents over mere prop­ erty rights in tangible goods. 53 Tuccille. and other tangible goods. in her bizarre notion that “patents are the heart and core of property rights. actions are owned as well.
18
. My criticism of Galambos’s ideas in what follows only applies to the extent that I am properly de­ scribing his views. 52 Friedman.” 51 Rand. as compared with the “primary” status of property rights in ideas. Foerster. And by extending the term of patents and copyrights to infinity.”50 Since the “first derivatives” of a man’s life are his thoughts and ideas. presumably) to Andrew Joseph Galambos.” as a royalty to the descendants of Thomas Paine. would be unable to change his name as a solution to the pro b­ lem. “In Defense of Private Orderings. the absurd­ ity and injustice caused by IP becomes even more pronounced (as Galambos demonstrates).” p.” Since action is based on primary property (ideas). are produced by ideas and action. 70. such as land. thoughts and ideas are “primary property.” n. 133. because this solution was Galambos’s inalienable. this is referred to as “liberty.53 By widening the scope of IP. claiming a property right in his own ideas and requiring his students not to repeat them.” n. “absolute” idea.

N. Libertarians believe in property rights in tangible goods (re­ sources). every single action. accreted IP rights. 467. giving rise to the need for ethical rules to govern its use. 326–27. unless he is granted license by the originators (or their distant heirs) of such techniques. thus adopting the ethically arbitrary dis­ tinctions noted above. we have a spiritual aspect. and would threaten to overwhelm them.
54
19
.. as giving rise to property rights. and the human race would die of starvation. Such unbounded ideal rights would pose a serious threat to tangible-property rights. The very possibility of conflict over a resource renders it scarce. Why? What is it about tangible goods that makes them sub­ jects for property rights? Why are tangible goods property? A little reflection will show that it is these goods’ scarcity —the fact that there can be conflict over these goods by multiple human actors. All use of tangible property would by now be impossible. No one could use a vari­ ety of life-saving techniques. the fundamental social and ethical function of property rights is to
Harry Binswanger. breathing human beings. as Rand noted.
IP AND PROPERTY RIGHTS
Property and Scarcity
Let us take a step back and look afresh at the idea of property rights. would be bound to in­ fringe upon one of the millions of past. The remaining advocates of IP all qualify their endorsement by limiting the scope and/or terms of IP rights. as discussed below. but also a physical one. The Ayn Rand Lexicon: Objectivism from A to Z (New York: New American Library. But. or treatments without ob­ taining permission of various lucky. men are not ghosts. rich descendants. Stephan Kinsella – Against Intellectual Property a house without getting permission from the heirs of the first proto­ human who left the caves and built a hut. No one living can actually act in accordance with such an unrestricted view of IP. or use pickling to preserve foods. A deeper problem for the natural-rights position lies in its undue emphasis on “creation. 1986).” instead of scarcity.54 Any system that elevates rights in ideas to such an extreme that it over­ rides rights in tangible things is clearly not a suitable ethical system for living. pp. chemicals. as every con­ ceivable use of property. No one would be able to boil water to purify it. ed. Thus.

” pp. “Intellectual Property: Copyright and Patent. also pp. no conflict over the use of goods is possible and no action-coordination is needed. they must be visible . in order for individuals to avoid using property owned by others. “Jus­ tice and Property Rights. A Theory of Socialism and Capitalism. reprint. 235 n. A Theory of Socialism and Capitalism (Boston: Kluwer Academic Publishers. 50 (distinguishing between “stat­ ic” and “dynamic” scarcity). 864–65. Calculation. pp. is to permit economic calculation. 1989). contains things that are economically scarce. 140–41. 860–61. The function of property rights is to prevent interpersonal con­ flict over scarce resources.e. along with money prices arising from exchanges of property. Rothbard. and Tucker.” Quarterly Journal of Austrian Economics 2. correctly conceived. see McElroy. 56 Hans-Hermann Hoppe. “Knowledge. property bor­ ders and property rights must be objective (intersubjectively ascer­ tainable). New York: Liberal Arts Press. 261–66 and n. a theory of the as­ signment of rights of exclusive control over scarce means. Stephan Kinsella.57 Nature. i. I owe this clarification to Gene Callahan. then. “ Intellectual Property: A Non-Posnerian Law and Economics Approach. 9. Palmer. 1957). Hume. David Hume.
55
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.” in The Logic of Action One. or catallactic. Palmer. Barnett.Journal of Libertarian Studies prevent interpersonal conflict over scarce resources. insofar as goods are superabun­ dant (“free” goods). p. 35–36. 57 Plant. pp. The Structure of Lib­ erty: Justice and the Rule of Law. and Rothbard. Clearly. “Are Patents and Copyrights Morally Justified?” pp. on Tucker. My use of such a thing conflicts with (excludes) your use of it. Palmer.. See N.56
Others who recognize the importance of scarcity in defining what property is include Plant. An Inquiry Concerning the Principles of Morals: With a Supplement: A Dialogue (1751.” pp.58 For this reason. 49–71. Because only then does it become possible to avoid oth­ erwise inescapable and unresolvable conflict. p. 279–80. the term “visible” here means o bservable or discernible. and Law: Review Essay of Randy E.55 As Hoppe notes:
[O]nly because scarcity exists is there even a problem of formulating moral laws. role for private property rights. no. To perform this function. and vice­ versa.” 58 Hoppe. Hence. it follows that any ethic. must be for­ mulated as a theory of property. “The Economic Theory Concerning Patents for Inventions. 4 (Winter 1999). by allocating exclusive ownership of re­ sources to specified individuals (owners). I do not mean to restrict rights to the sighted. 274. property rights must be both visible and just. property rights
The fundamental economic. Conflict.

pp. A Theory of Socialism and Capitalism. as well as visible. Conflict can be avoided with such property rights in place because third parties can see and. 2 (Fall 1996). “good fences make good neighbors. no. 313–26. N. given the origin. p. Rothbard. Hoppe. this is like having no property rights at all. (Please do not e-mail me about this. and the allocation is de­ monstrably just. 7. be­ cause they cannot serve their function of preventing conflict unless they are acceptable as fair by those affected by the rules. and de Jasay. But as libertarians rec­ ognize. pp. no. Only the first-occupier home­ steading rule provides an objective. others no longer have the option of being its first-user. “A Libertarian Theory of Punis hment and Rights” Loyola of Los Angeles Law Review 30 (Spring 1996). A The­ ory of Socialism and Capitalism. The Ethics of Liberty. 105: “Once the item is owned by the first-user. I do not care what Frost “really” meant in that poem. Hoppe. I just like the say­ ing.” in The Logic of Action One. that they are applicable only to scarce resources. On the ethical justifications of such a property-rights scheme. pp. p. The Economics and Ethics of Private Property (Bos ton: Kluwer Academic Publishers. property borders are visible. see Hoppe. pp.
59
21
.60 If prop­ erty rights are allocated unfairly. 1 (1997).” in North of Boston. (New York: Henry Holt. Jeffrey M. chap. 141–44. Against Politics.” Review of Austrian Economics 10. Stephan Kinsella. 607.61 When property rights in scarce means are allocated in accordance with first-occupier home­ steading rules. In other words. The Economics and Eth­ ics of Private Property. pp.. Stephan Kinsella – Against Intellectual Property must be objective and unambiguous. “The Pareto Rule and Welfare Economics. N.) 60 Hoppe.
Robert Frost. thus.N. A Theory of Socialism and Capitalism. it is merely might versus right again. “Justice and Property Rights. 1993). Herbener. But surely it is clear. ethical. 11–13. 191–93. Hoppe. p. and be motivated to do so b ecause the allocation is just and fair.e. i. sidestep the prop­ erty borders. 172–79. it is only the first occupier or user of such property that can be its natural owner. the pre-property rights situation. and function of property rights. their prefe rences at that point in time have no bearing on the Pareto-superior nature of the acquis i­ tion by the first-user”.”59 Property rights must be demonstrably just. Rothbard. Stephan Kinsella. on the proper approach to homesteading and the first-user rule (the prior-later distinction). 1915). and non-arbitrary allo­ cation of ownership in scarce resources. justification. 2nd ed. 138. 61 See. or simply grabbed by force. thus. “New Ration­ alist Directions in Libertarian Rights Theory.” Journal of Libertarian Stud­ ies 12. following Locke. “The Mending Wall.

receives instruction himself without lessening mine. and cannot be. there is no need for exclusivity. If you take my car. would not even arise. 13. The problem with IP rights is that the ideal objects pro­ tected by IP rights are not scarce. The same holds true for inventions and.—wrote.A. There is no economic scarcity. Thus. there would be no scarcity and. As Thomas Jefferson—himself an inventor. But if you “take” a book-pattern and use it to make your own physical book. Lawnmower-taking in these circumstances would not be “theft. in The Writings of Thomas Jefferson. Thus. If I invent a technique for harvesting cotton. and no possibility of conflict over the use of a scarce resource.
62
Thomas Jefferson to Isaac McPherson. allocated in accordance with the first­ occupier homesteading rule. Monticello. 1813. as he who lights his taper at mine.Journal of Libertarian Studies Were we in a Garden of Eden where land and other goods were in­ finitely abundant. For example. no need for property rules. authored works are not scarce in the same sense that a piece of land or a car are scarce. ed. further. indeed. le t­ ter. for any “pattern” or information one generates or has. therefore. August 13. discernible borders. A. Lipscomb and
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. The idea of conflict. because there cannot be conflict over such things. your harvesting cotton in this way would not take away the technique from me. that such property rights are not. I no longer have it. Your use does not exclude my use.” Property rights are not applicable to things of infinite abundance. and must be allocated in accordance with the first-occupier home­ steading rule. “He who receives an idea from me. I still have the orig­ inal (tangible) book. receives light without darkening me. I still have my own copy. property rights must have objective. property rights can apply only to scarce resources. Thus. as well as the first Patent Examiner in the U.
Scarcity and Ideas
Like the magically-reproducible lawnmower.”62 Since use of another’s idea does not deprive him of its use. your taking my lawnmower would not really deprive me of it if I could conjure up another in the blink of an eye. and the idea of rights. and. if you copy a book I have written. property concepts would be meaningless. Similarly. Moreover.S. I still have my technique (as well as my cotton). and I also still “have” the pattern of words that constitute the book. as will be seen below. we could both use my technique to harvest cotton. ideas are not scarce. vol.

364: “Such recipes are. 661.64 A. Yet this does not mean that Jef­ ferson supported patents. 128. See Palmer.” prop­ erty rights in patents and copyrights make possible the creation of a scarcity of the products appropriated which could not otherwise be maintained. Human Action. Even Rand acknowledged that “intelle c­ tual property cannot be consumed.N. the knowledge of the causal relation implied. Bergh (Washington.” “because their serviceableness cannot be exhausted. . provided it is known. p. free goods as their ability to produce definite effects is unlimited.C. The formula. Jefferson recognized that because ideas are not scarce. its productive power is inexhaustible. the recipe that teaches us how to prepare coffee. Stephan Kinsella – Against Intellectual Property no conflict over its use is possible. Also Mises. 326–38. and can be justified only. 1904). 364. “The Economic Theory Concerning Patents for Inventions. 63 Rand.” p. it is therefore not an economic good. they must be created by statute. one creates scarcity where none existed before. It does not lose anything from its capacity to produce however often it is used. 131. ideas. if at all. . “Intellectual Property: A Non-Posnerian Law and Economics Approach. since they are not natural rights). “Patents and Copyrights. for instance.” On p. to lead us “to make the most of them. as a rule.: Thomas Jefferson Memorial Association. 64 Plant. and.” “Thomas Jef­ ferson and the Patent Act of 1793. [Jefferson] retained a healthy skepticism about the value of the patents system. are not candi­ dates for property rights. 278 n. Any price paid for the services rendered by a recipe is always a monopoly
23
. by recognizing a right in an ideal object. tending . 36. p. 53. Walterscheid explains that “throughout his life. he points out: “A thing rendering such unlimited services is. However. renders unlimited services. even then. patent and copyright are not natural rights. Acting man is never faced with a situation in which he must choose between the use-value of a known formula and any other useful thing. They are not a conse­ quence of scarcity. Mises.” p. in Human Action. As Arnold Plant explains:
It is a peculiarity of property rights in patents (and copy­ rights) that they do not arise out of the scarcity of the ob­ jects which become appropriated. They are the deliberate creation of statute law. even on utilitarian grounds. on the utilitarian grounds of promoting useful inventions and literary works (and. They can become economic goods only if they are monopolized and their use is restricted.” See also p. pp.”63 Ideas are not naturally scarce.” p.E.” Essays in History 40 (1998). whereas in general the institution of pri­ vate property makes for the preservation of scarce goods. recognizes that there is no need to economize in the employment of “for­ mulas. Patent historian Ed­ ward C. therefore. D.

thus rendering the publicly available visual part of the movie of little interest. As he notes:
Natural scarcity is that which follows from the relation­ ship between man and nature. 66 Bouckaert. Such an argu­ ment would be completely circular. 799. However. It is immaterial whether the restriction of a recipe’s use is made possible by institutional conditions—such as patents and copyright laws— or by the fact that a formula is kept secret and other people fail to guess it. contract (more on this below). 803. 67 It could also be argued that ideal objects deserve legal protection as prop­ erty because they are “public goods. all designed to exclude non-contributors from enjoyment of service. 797–99. the concept of public goods is neither coherent nor justifiable. Movie theaters. contractual arrangement. un­ justifiable scarcity. installed—at con­ siderable expense—individual speakers for each car. invest in exclusion devices like ticket windows. because of negative external­ ities which arise if IP is not legally protected. i. Artificial scarcity. . capital marketing. See Palmer. and ushers. Hans-Hermann Hoppe.66 For ideal objects. on the other hand. Scarcity is natural when it is possible to conceive of it before any human. or they could ask government to force all non-contributors to wear special glasses which prevent them from enjoying the movie. . and that IP laws create an artificial. and other cost components. p. The costs
24
. As Palmer points out: “the cost of producing any ser­ vice or good includes not only labor. Arti­ ficial scarcity can hardly serve as a justification for the legal framework that causes that scarcity. Alternatively. On the contrary. ‘Drive-ins. “Fallacies of the Public Goods Theory and the Production of Security. “What is Property?” p. 1. no.67
price. the only protection possible is that achievable through personal rights. institution­ al. “Intellectual Property: A Non-Posnerian Law and Economics Approach. 793.” Journal of Libertarian Studies 9. 1 (Winter 1989). movie owners could set up projectors and screens in public parks and then attempt to prevent passers-by from watching. The Economics and Ethics of Private Property. of course. .” pp. Bouckaert maintains that “only naturally scarce entities over which physical control is possible are candidates for” protection by real property rights.” that is. “What is Property?” pp. also Hoppe. 283–87.65
Thus. see also pp. walls.” 65 Bouckaert.e.. is the outcome of such arrangements.Journal of Libertarian Studies Bouckaert also argues that natural scarcity is what gives rise to the need for property rules. 27. chap. but also fencing (or exclusion) costs as well. ar­ tificial scarcity itself needs a justification. for example.’ faced with the prospect of free riders peering over the walls. 279–80.

Y. We see. Further problems with natural-rights defenses are ex­ plored below. for the same reasons that even wealth-increasing measures are not necessarily justified. It is not surprising that. scarce resources are the possible object of inter­ personal conflict. because he can prohibit them from performing certain actions with their own property . so it is only for them that property rules are appli­ cable. by merely thinking of and recording some original pattern of informa­ tion. 284–85.N. The pattern-creator has partial ownership of others’ property. Author X. as Palmer notes. He has some say over how third parties can use their prop­ erty. “[m]onopoly privilege and censorship lie at the historical root of patent and copyright. Thus. IP law tres­ passes against or “takes” the property of tangible property owners. for example. Moreover. IP rights change the status quo by redistributing property from individuals of one class (tangible -property owners) to individuals of another (authors and inventors). Let us recall that IP rights give to pattern-creators partial rights of control—ownership—over the tangible property of everyone else. therefore. can prohibit a third party. magically becomes a partial owner of others’ property.
of exclusion are involved in the production of virtually every good ima g­ inable. by merely authoring an original expression of ideas. that utilitarian defenses do not do the trick. the IP creator instantly. then. as discussed above. 68 Palmer. from inscribing a certain pattern of words on Y’s own blank pages with Y’s own ink. Stephan Kinsella – Against Intellectual Property Only tangible. Prima facie . “Intellectual Property: A Non-Posnerian Law and Economics Approach. There is no way to show that ideas are clearly public goods. It is this invasion and redistribution of property that must be justified in order for IP rights to be valid. 264. “Intellectual Property: A Non-Posnerian Law and Economics Approach. That is.” pp. by transferring partial ownership to authors and inventors.” Palmer. There is no compelling justification for singling out some goods and insisting that the state underwrite their production costs through some sort of state-sanctioned collective action. this does not justify treating them as pro p­ erty rights.” p. patents and copyrights are unjustifiable monopolies granted by government legislation. or by finding a new way to use his own property (recipe). even if ideas were public goods. by vir­ tue of his IP right.”68 It is this monopoly privilege that creates an artificial scarcity where there was none before. simply because of a decision to make the good available on a nonexclusive basis.
25
.

unowned resources come to be owned—homesteaded or appropriated—by the first pos­ sessor. As noted before. A Theory of Socialism and Capitalism. hold that creation is the source of property rights. or I can fence in a plot of land for a farm. and different ways to demonstrate or prove such occupation. or even “create” a farm on a plot of land. such as Rand. Given scarcity and the correspondent possibil­ ity of conflict in the use of resources. We can see from these examples that creation is relevant to the question of ownership of a given “created” scarce resource. This section discusses further prob­ lems with such arguments. and (3) by merely marking it as ours. conflicts are avoided and peace and cooperation are achieved by allocating property rights to such resources. Thus. It is sometimes said that one form of oc­ cupation is “forming” or “creating” the thing. 71 Hoppe. And the purpose of property rights dictates the nature of such rules. 142. For if the rules allocating property rights are to serve as objective rules that all can agree upon so as to avoid conflict. in light of the preceding discussion of the significance of scarcity. p.Journal of Libertarian Studies
Creation vs. 7.69 This confuses the nature and reasons for property rights. 72 Occupancy or taking possession “can take three forms: (1) by directly grasping it physically. p. they cannot be biased or arbitrary. “Response to Kinsella”. and Herbener. 838. 105. Franck. then. some libertarian IP advocates. “Intellectual and Personality Property” and “Intellectual Property Rights: Are Intangibles True Property?” 70 See Hoppe. Against Politics. esp. 72 For example. Scarcity
Some inconsistencies and problems with natural-rights theories of IP were pointed out above. A Theory of Socialism and Capitalism. 138. or forge a sword from raw metal. (2) by forming it. pp. 172–79.” p. There are various ways to possess or occupy resources. I can sculpt a statue from a block of marble. “The Pareto Rule and Welfare Econom­ ics. is that ownership of a given scarce re­ source can be identified by determining who first occupied it.71 The general rule. chap. which lie in the undeni­ able fact of scarcity. Kelley. “Patents and Copyrights”. 70 For this reason. de Jasay.
69
26
. I can pluck an apple from the wild and thereby homestead it. depending upon the na­ ture of the resource and the use to which it is put. such as
See Rand. “Are Patents and Copyrights Morally Justified?” p.” Palmer.

45–46.
73
I also do not need to rely on “ownership” of my labor. trans. there is no need to place creation as the fount of property rights. One reason for the undue stress placed on creation as the source of property rights may be the focus by some on labor as the means to homestead unowned resources. (1821. I do not need to rely on the fact of creation to own the sword.F. reprint. as the key to homesteading. only to the extent that the act of creation is an act of occupation. is both neces­ sary and sufficient for the homesteading of unowned scarce resources. I may owe you damages for trespass or conversion. This is manifest in the argument that one homesteads unowned property with which one mixes one’s labor because one “owns” one’s labor. However. as Obje ctivists and others do. Hegel’s Philosophy of Right. Consider the forging of a sword. as Palmer correct­ ly points out. “occupancy. Hegel. strictly speaking. I own the resulting thing into which I transform them. not creation or labor. “creation” itself does not justify ownership in things. and ei­ ther I own them or I do not. and labor ownership need not be relied on to show that I maintain ownership of my property as I transform it. 1967). If not. T. sword. by virtue of such ownership. or farm. is the act by which external things become property. I do not own the resulting sword. but only on my ownership of the fac­ tors used to make the sword. rather than on labor. Creation. First occupation. “Are Patents and Copyrights Morally Justified?” p. or is otherwise evidence of first occupation. pp. Knox. 838 (em­ phasis added). then I do not own the resulting product. If I own some raw metal (be­ cause I mined it from ground I owned). citing Ge org W. therefore. One cannot create some possi­ bly disputed scarce resource without first using the raw materials used to create the item. If I own the inputs.M. London: Oxford University Press. Stephan Kinsella – Against Intellectual Property a statue. But these raw materials are scarce. then I own the same metal after I have shaped it into a sword. 74 Palmer. not labor. it is neither necessary nor sufficient.
27
. On the other hand. then.”74 By focusing on first occupancy. since I can homestead them by simply mining them from the ground and thereby becoming the first possessor. if I fashion a sword using your metal. However. In fact. is neither necessary nor sufficient to estab­ lish ownership. The focus on creation distracts from the crucial role of first occupation as a property rule for addressing the fundamental fact of scarcity. labor cannot be owned.N. 73 And I do not need creation to come to own the factors.

property rights must be recognized in first-comers (or their contractual transferees) in order to avoid the omnipresent problem of conflict over scarce resources..” i. the Lockean idea
75
Even such advocates of IP as Rand do not maintain that creation per se is sufficient to give rise to rights. it is the way that some tangible things (e. “The Nature of Go vern­ ment. then. bodies) act in the world. views rights as a social concept arising only when there is more than one person. Creation itself is neither necessary nor sufficient to gain rights in unowned resources.” Indeed. conflict—even among “fully rational and faultlessly moral” men. p. lies in the argument that because an author–inventor “creates” some “thing.e. The problem with the natural rights defense of IP. as Rand argues. 334.e. as pointed out above. It is also not sufficient. In the case of “created” goods (i. and the like).” he is “thus” entitled to own it. it seems natural that the “creator” of this piece of property is the natural and proper owner of it. including property rights. when there is a scarce (ownable) resource. On p. etc. Rand. rather. Rand’s view even implies that rights. only arise when there is a possibility of conflict. “Man’s rights can be violated only by the use of physical force.g. The argument begs the question by assuming that the ideal object is ownable in the first place. Labor is a type of action. Under the libertarian approach. fashioning it into an ar­ tifact.Journal of Libertarian Studies Instead.” in Capitalism: The Unknown Ideal.
28
.. 330. for example. once this is granted. Rand attempts (unsuccessfully) to justify government. or that creation is even necessary. it can sometimes be assumed that the creator is also the first occu­ pier by virtue of the gathering of raw materials and the very act of creation (imposing a pattern on the matter. It is not necessary because unowned property can be homesteaded by simply occupying it. sculptures. “Man’s Rights. which involves no “creation” unless one stretches the con­ cept without limit. farms. 321: “A ‘right’ is a moral principle defin­ ing and sanctioning a man’s freedom of action in a social context. So. But it is not creation per se that gives rise to own­ ership..” in Capi­ talism: The Unknown Ideal. Further. based on the fact that there can be “honest disagreements”—i.. in Rand’s theory. because Rand would certainly not hold that creating an item using raw material owned by others gives the thief–creator ownership of the item.e. there is no need to maintain the strange view that one “owns” one’s labor in order to own things one first occupies.75 For similar reasons.). See Rand. the agent that enforces rights. p. and action is not ownable. we identify its owner by determining who its first occu­ pier is. However. ideal ob­ jects are not ownable. some conflict over a scarce resource.

It is not because the labor must be rewarded. 13. are “inherent” in an individual. Franck believes that men “need” to be able to create things in order to survive—in a social setting where the presence of other men makes disputes possible. just as in the theory of property advocated herein. (As pointed out in the preceding footnote.” p.) Moreover. 7.” p. and the creation argument is not more individualist than the scarcity argument. but. the scarcity-based argument set forth here is no more a “function of society’s needs” than is Franck’s Objectivist approach. According to Franck. Whatever the relative merits of the creation-based and the scarcity-based positions. law should allocate property rights in scarce resources. writes: “Property rights are re­ quired because man needs to support his life by the use of his reason. scarcity is not the “basis” for property rights. but a necessary background condi­ tion that must obtain befo re property rights can arise or make sense. Kelley. which are relational con­ cepts that only apply in a social context. not abundant ones. “although property rights help ‘ration’ scarcity. “Intellectual and Personality Property. homesteaded—unowned scarce resources. the scarcity argument is not more collec­ tivist than the creation argument. con­ flict can arise only over scarce resources. and the latter borders on the scientistic (in using the precise mathematical and natural-sciences notion of “functions”). The primary task in this regard is to create values that satisfy human needs. . But the scarcity-based argument recognizes that men “need” to be able to use scarce resources and that this requires conflicts to be avoided.” as if they could be decreed by God or government). The former notion verges on the positivistic (in implying rights have a “source. Thus.N. and to avoid interpersonal conflict over such means.76
creation per se is neither necessary nor sufficient. instead. Stephan Kinsella – Against Intellectual Property of “mixing labor” with a scarce resource is relevant only because it indicates that the user has possessed the property (for property must be possessed in order to be labored upon).
29
. scarcity is not the basis of property rights. or that they are “functions” of anything. And the argument for property rights is not based on a need to “ration” scarce items. 76 It is for these reasons that I disagree with the creation-centered approach of Objectivists David Kelley and Murray Franck. nor because we “own” labor and “therefore” its fruits. thus.” law should protect rights to created things. creation and labor-mixing indicate when one has occupied—and. appears to reverse cause and effect in that it sees rights as a function of society’s needs rather than as inherent in the individual who in turn must live in society. The view that it is . Objectivism also holds that conflict-possibility is just such a necessary condition for property rights. on the need of individuals to employ means to achieve ends. in “Response to Kinsella. thus. In other words. “Thus. .” I am not sure what it means to say that rights.

Pre­ sumably. such as a new product. . But he does not need to have a right in the ideal ob­ ject of the mousetrap-idea or pattern in order to own the final product itself. one ac­ quires the right of control over all others’ scarce resources. including creation of “values. . as inputs to the process of creating value. much as Adam Smith’s flawed labor theory of value led to Marx’s even more deeply-flawed communist views on exploitation. which I criticize below. tangible thing. or artistic pattern with one’s own property. IP ad­ vocates are led to place undue stress on the importance of “reward­ ing” the labor of the creator. But for things that one has created.” has to rely on the use of scarce means. Adam Smith who was almost solely responsible for the injection into economics of the labour
30
. 77 As noted above. p.g. [T]he es­ sential basis of property rights lies in the phenomenon of creating value. Second. Scarcity becomes a relevant issue when we consider the use of things in nature. by creating a pattern or idea. such as land. . and by creating a new. Finally. Condition (2) holds only when the resource is scarce. 1 (Brook­ field. even with their own property. and only the former can be justified. scarce. he already owned the raw materials. and still owns them after he reshapes them.e. such a good is an actual. rather than on first occupan­ cy of scarce resources. e. Each act of creation employs things made of already existing atoms. Rothbard. and 2) that productive use must require exclusive con­ trol over them. these two homesteading rules are in conflict. such as a mousetrap.. that is. . vol. IP rights are. as animals do. 77 See. as the touchstone of property rights. i. but let me point out that all human action. wish to create higher-order values by using scarce resources does not change this analysis. . Economic Thought Before Adam Smith: An Austrian Perspective on the History of Economic Thought. the creator owned the scarce raw materials which he transformed into the final product. neither this fact. . the material stuff of the world. I would say that two conditions are required in order to appropriate things in nature and make them one’s property: 1) one must put them to some productive use. Kelley ad­ vocates two separate rules for homesteading scarce resources: by first use of the resource. as opposed to animals.: Edward Elgar. If Kelley instead means that. one’s act of creation is the source of the right. nor the recognition of it.Journal of Libertarian Studies By focusing on creation and labor. regard­ less of scarcity” (emphasis added). which gives the creator the right to stop all others from using a similar pattern. . My reasons for disagreeing with Kelley here should be apparent. the right to exclude others.. . If Kelley here means a tangible product. Murray N. As a general rule. regardless of scarcity. Vt. indeed. 453: “It was. 1995). is animal-like in any pejorative sense. Kelley states that the creator of a new product owns it because he created it. As discussed below. . useful. for Rand. in
rather than relying on what we find in nature. then he is ad­ vocating a new type of homesteading rule. That men.

though. they de­ serve no reward).” Even otherwise sound thinkers sometimes place undue stress on the im­ portance of labor to the homesteading process and its ability to be “owned. of the right to private property.” Rothbard. the natural-rights IP approach implies that some­ thing is property if it can hold value. for instance. just as the right to “free speech” is only a consequence. Stephan Kinsella – Against Intellectual Property a sense. 139–41. many arbitrarily­ defined “things” can acquire economic value if government grants a monopoly over the thing’s use. 237 n.
31
.
Two Types of Homesteading
What. the reward for productive work. even if the thing is not otherwise a scarce resource (e. in a strange admixture of natural-rights and utili­ tarian thinking. this necessarily means
theory of value. p. the Postal Service’s monopoly power to de­ liver first-class letters).e. 49. or a derivative.” p. but only in its physical integrity.. Thus.. and innovations continually enrich us. artistic creations. emphasis added. they are not the proper subject of property rights designed to avoid such conflicts. 15. one cannot have a property right in the value of one’s prop­ erty. Capitalism. pp.78 In addition. since new ideas. 17. 78 See also Reisman. 284. esp. as Rothbard recognized in The Ethics of Liberty.. implies that an individual “owns his own person and therefore his own labor. 388–89. chap. pp. But as Hoppe has trenchantly shown. is really wrong with recognizing “new” property rights? After all. And hence it was Smith who may plausibly be held re­ sponsible for the eme rgence and the momentous consequences of Marx. see also Rothbard. 79 Hoppe. Rand and other natural-rights IP proponents seem to adopt a mixed natural rights– utilitarian rationale in holding that the person who invests time and effort must be rewarded or benefit from this effort (e. Rand op­ posed perpetual patent and copyright on the grounds that because distant descendants did not create their ancestors’ works. 79 Moreover.g. labor.N. A Theory of Socialism and Capitalism.g. because ideas are not scarce resources in the sense that physical conflict over their use is possible. The right to use or profit from one’s labor is only a consequence of being in control of one’s body. “Justice and Property Rights. The Eth­ ics of Liberty. It is a misleading metaphor to speak of “owning one’s labor” (or one’s life or ideas). what is the harm in moving with the times by recognizing new forms of property? The problem is that if property rights are recognized in non-scarce resources.” Rothbard himself. i.

The thief effectively proposes a new and arbitrary homesteading rule to replace the first-occupier rule. But the first man to invent a house. not universal. To be sure. and they start building their own cabins. even on their own property . such a rule is no rule at all. the particularistic rule “ I become the owner of property when I forcibly take it from you. Proponents of IP must also advocate a new homesteading rule to supplement. by inventing a new technique for digging a well. The thief’s rule is particular. imagine the time when men lived in caves. They must maintain that there is a second way for an individual to come to own tangible property. For. namely. with respect to that property’s similar use. One bright guy— let’s call him Galt-Magnon—decides to build a log cabin on an open field.” This new-fangled home­ steading technique is so powerful that it gives the creator rights in third parties’ already owned tangible property. this is a good idea. with their own logs. and others no­ tice it. in our real. In fact. They naturally imitate Galt-Magnon. because the property is already owned. not in a scarce resource—means that I have some control over everyone else’s scarce resources. becomes its owner. To take another exam­ ple. scarce world..e. the first-possessor homesteading rule. it is the first occupier of a previously unowned scarce resource who homesteads it. For example. the inventor can prevent all others in the world from digging wells in this manner. A late-comer who seizes con­ trol of all or part of such owned property is simply a thief. and is clearly inferior to the first-possessor rule. This is because the only way to recognize ideal rights. is to allocate rights in tangible goods. near his crops. if not replace. would have a right to prevent others from building houses on their own land. which undercuts the libertarian homestead­ ing principle. i. and it certainly is not designed to avoid conflicts. For me to have an effective patent right—a right in an idea or pattern. To wit. or to charge them a 32
.Journal of Libertarian Studies that property rights in tangible resources are correspondingly dimin­ ished. the IP advocate must propose some homesteading rule along the following lines: “A person who comes up with some useful or creative idea which can guide or di­ rect an actor in the use of his own tangible property thereby instant­ ly gains a right to control all other tangible property in the world. according to IP advocates. we can see that IP rights imply a new rule for acquiring rights in scarce resources. according to Lockean–libertarian homesteading. it is not just.” Of course.

objective rules that avoid interpersonal conflict over scarce resources. due not to first occupation and use of that property (for it is already owned). Or: the third occupier of a scarce resource becomes its owner. None of them establish fair. no. are un­ justifiable. then. but due to his coming up with an idea.” Formulations 4. Or: by legisla­ tive decree.
80
See McElroy.” pp. They all conflict with the only justifiable homesteading rule. a racist could pro­ pose that any white person can homestead any property already first homesteaded by a black person. Roy Halli­ day.” or “things of value” only serves to obscure the fact that the proponent of IP opposes the un­ adulterated right to homestead and own private property. in the form of taxes.
IP AS CONTRACT
The Limits of Contract
The law. land and logs) of others. in fact. Palmer. It is plain that the innovator in these examples becomes a partial owner of the tangible property (e. no reason why merely innovating gives the in­ novator partial ownership of property that others already own. Clearly. Just because a rule can be proposed does not mean that it is workable or just. 4 (Summer 1997).. 280. All such arbitrary homesteading rules. Palmer. There is not a natural right to ideal objects—to one’s intellectual innovations or creations—but only to scarce resources. “What is Property?” pp. including the IP rule that innovators homestead partial control of all others’ tangible resources. even if already first acquired by individuals. first occupation. part of the estates that are already owned by private individuals. Or: the state can homestead all capital goods. should protect individual rights to one’s body. There are many arbitrary rules one could dream up by which property rights could be allocated. There is. Discussions of protecting rights in “ideas.N. 291–95. this rule flies in the face of the first-user homesteading rule. “Ideas as Property. Many opponents of IP rights typically support only contractual arrangements to protect ideas and innovations—private contracts between property owners.80 Suppose. For example. “Intellectual Property: Copyright and Patent”.g. Bouckaert. arbitrarily and groundlessly overriding the very homesteading rule that is at the foundation of all property rights. and to legitimately acquired scarce resources (property). “Are
33
. Stephan Kinsella – Against Intellectual Property fee if they do build houses. the state can homestead. “Intellectual Property: A NonPosnerian Law and Economics Approach. 804–5.” “creations.

” Journal of Libertarian Studies 1. Barnett. 2 (Winter 1995–96). 269–321. 864. Under all theories of contract. See Paul E. if he violates these provisions. regardless of their consent to a contract. If I learn how to adjust my car’s carburetor to double its efficiency. “A Consent Theory of Contract.81 But the advocates of the contractual approach to IP are mistaken if they believe that private contract can be used to recreate the same type of protection afforded by modern IP rights. these third parties T are not bound. any of the buyers B becomes liable to A. those not in “privity” with the original parties. It is like private law between the parties..Y. Paul.g. 82 Under the international law meta-rule pacta sunt servanda (contracts are to be observed). chap. Hammer. .” Colum­ bia Law Review 86 (1986). at least for damages. 795. Rothbard. Evers. 1990). 5. “A Theory of Contracts”. and Richard O. in gen­ eral. (St. no. BN.. 805. contracts between s overeigns (states. Williamson M. B2 . Protecting Foreign Investment Under International Law: Legal Aspects of Political Risk (Dobbs Ferry.e. binds only parties to the contract. and Randy E.82 It does not bind third parties. The Ethics of Li­ berty. no. pp. pp. in the intern ational law context) create a “law of the agreement” between the parties. if the book purchaser B relates to third parties T the plot of the purchased novel. 3–13. 81 See. e. 821 n. See also. in the IP context. Bouckaert. 19.Journal of Libertarian Studies for example. by the original contractual obligation between A and B. N.
34
. “Intellectual Property Rights Viewed as Contracts. why should I have to pretend that I am ignorant of these things.” see Black’s Law Dictionary. with a contractual condition that each buyer B is obligated not to make or sell a copy of the text. Patent and copy­ right are good against all third parties. 6th ed.: Oceana Publications. A contract.: West Publishing. 1199. 1 (Winter 1977). Kinsella. i. 8. Stephan Kinsella. “Toward a Reformulation of the Law of Contracts. Comeaux and N. “What is Property?” pp. . p. in the same way that my title to a parcel of land binds everyone to respect my property—even if they do not have a contract with me. chaps. I do not deny that contractual obligations
Patents and Copyrights Morally Justified?” pp. 1997). by contrast. 83 For a definition of “privity of contract. and re­ frain from acting on this knowledge? I have not obligated myself by contract to the creator. Minn.83 Thus. 2.” Formulations 3. that A writes a book and sells physical copies of it to numerous purchasers B1 . or if I learn of a poem or movie plot someone else has written. They are real rights that bind everyone. 851–55.

Artistic works. who are not parties to the contract and are not in privity with the contractual obligor and obligee. one cannot have a right to the value of one’s property. physically inter­ feres with the creator’s use of his own tangible property. 237 n. For example. 17. So. then. For this reason. A Theory of Socialism and Capitalism. At most. Nor can it be said as a general matter that I have stolen or fraud­ ulently acquired the information. some quasi-IP advocates shift from a purely contractual ap­ proach to a “reservation of rights” approach in which property rights in tangible resources are seen as a divisible bundle of rights. except for an easement (servitude) granting
84
Hoppe. Stephan Kinsella – Against Intellectual Property can be implicit or tacit. Reserved Rights
Third parties. or writing a novel using the same plot. as there are many legitimate ways for individuals to acquire information. my use of this idea will diminish its value to the in­ ventor by hampering his ability to monopolistically exploit it. but only in its physical integrity. it is not theft. And it certainly cannot be said that my use of my carburetor. although an innova­ tor can use contract to stop specified individuals from freely using his ideas. are not bound by the contractual relationship. but he cannot prevent third parties from publishing and sell­ ing it. under the standard bundle -of-rights view. a land­ owner can sell the mineral estate to an oil company while retaining all rights to the surface.N.84 Thus. and it is not physical trespass on the inventor’s tangible property. Perhaps sensing this problem. pp.
Contract vs. 139–41.
35
. As we have seen. It does not even prevent the creator from using his own carburetor idea to im­ prove his own car or others’. it is difficult to use standard contract law to prevent third parties from using ideas they glean from others. the use of contract only gets us so far. but there is not even an implicit contract in such situations. typically are made public. by their very nature. unless some contract prohibits this action. or from using that plot. A book publisher may be able to contractually obligate his purchasers to not copy his book. Twiddling my carburetor does not violate the inventor’s rights. my adjusting my carburetor is not a breach of contract. however. Scientific discoveries and innova­ tions likewise can become known beyond the parties to confidenti­ ality agreements.

but because “no one can acquire a greater property title in something than has already been given away or sold. Thus. 123. even if T finds and homesteads the abandoned BOOK2 . Drawing on the bundle -of-rights notion. BOOK1 and BOOK2 . the other somehow contains more mystical “rights-essence” within its covers. was not entitled to transmit it to others. if T
85
Rothbard. wherever he may be. the inventor of an improved mousetrap.” Or. p. the third party acquires “ownership” of information.Journal of Libertarian Studies passage to a neighbor and a life estate (usufruct) granting use of the surface estate to his mother. Rothbard. Like the real rights accompanying statutory IP..” much like an electronic toy that is sold “batteries not included. the “reservation of rights” approach holds that a type of “private” IP can be privately generated by creatively “reserving rights” to repro­ duce tangible items sold to purchasers. not just those who have contracted with the original seller. BOOK2 .85 But surely something is amiss here. without a res­ ervation of rights) to B1 . such “reservations” allegedly bind everyone. Suppose that A writes a novel and sells a first copy. say—but it is somehow “missing” the “right-to-copy” part of the bundle of rights that “normally” constitutes all rights to the thing.” It is as if there is an invisible. Yet they are not: one is incomplete. appear to third parties to be otherwise identical. According to Rothbard. Thus. BOOK1 . Or. can stamp it “copy­ right” and thereby sell the right to each mousetrap except for the right to reproduce it. third parties who become aware of.e. purchase. without restriction (i. Thus. mystical tendril of “reproduction-ownership” stretching from BOOK2 back to its true owner A. Brown. argues that one can grant conditional “ownership” (of “knowledge”) to another. Suppose B1 and B2 leave these books on a park bench. or otherwise come into possession of the restrict­ ed item also cannot reproduce it—not because they have entered into a contract with Brown. to B2 —but “reser­ ving” the book’s inherent “right to copy. BOOK2 is “missing” the “right to copy. where they are discovered by third party T. the third party acquires a tangible thing—a book or a mousetrap. and a second copy. thus. The Ethics of Liberty. for example.
36
. while “retaining the own­ ership power to disseminate the knowledge of the invention. this book simply does not contain “within itself” the right to per­ mit the owner to copy it.” In other words.” The two books. It is being continually siphoned away by a rights wormhole which connects the item to owner A. from a person who did not own the information and.

BOOK1 and BOOK2. Only if borders are visible can they be respected and property rights serve their function of permit­ ting conflict-avoidance. invisi­ ble. to remember something? Suppose that I wrote a book and offered it to you to read. Stephan Kinsella – Against Intellectual Property homesteads the book. The first question is whether such a separa­ tion between ownership of the thing and the power to produce fa csimiles which is given with the thing is compatible with the concept of property. possibly unknown and unknowable property border? The implications of such a view are troubling. spooky. “Are Patents and Copyrights Morally Justified?” p. One function of property rights. Is such a view really tenable? Can we conceive of property rights working this way? Even if we can. after all. a power which thereupon pas ses into another’s possession.N. Hegel argued: “The substance of an author’s or an inventor’s right can­ not in the first instance be found in the supposition that when he disposes of a single copy of his work. How could one tell the difference between them? How could one see the rights-tendril connected to the latter but not to the former? How can third parties be expected to respect an amorphous. does not have the right to copy BOOK2 . Palmer also quotes the following illuminating passages. for example. Could one reserve the right. The same is true for subsequent third parties who come to possess the book. T homesteads only a book without a right to copy “built in. mystical. thus. should not become the property of the other but should remain his own. But think of the two books. 853. Palmer writes:
The separation and retention of the right to copy from the bundle of rights that we call property is proble matic. Only if these borders are both visible and objectively just (justifiable in discourse) can they be expected to be adopted and followed. he arbitrarily makes it a condition that the power to produce facsimiles as things. or whether it does not cancel the complete and free ownership on which
37
. The bor­ ders of property must necessarily be objective and intersubje ctively ascertainable. Would I be justified in taking you to court if I could prove that you had remembered the name of the lead character in the book? 86
86
Palmer. but I had retained one right: the right to remember it. he still homesteads no more than he acquires. they must be visible . is to prevent conflict and to put third parties on notice as to the property’s boundaries.” and. would it really achieve the desired result here—preventing third parties from using the protected ideas? It is difficult to maintain that rights can be reserved in this manner.

55.
38
. . 853 n. how does this prevent third parties from using information apparent from or conveyed in that object? Reserv­ ed rights proponents say more than that the immediate buyer B1 is bound not to reproduce the book. .” Hegel’s Philosophy of Right. or to part with this pow­ er as a thing of value. quoted in Palmer. for this result could be obtained by pointing to the implicit contract between seller A and buyer B1 . ed. consider third party T2 . see Immanuel Kant. graffiti. Let us consider a third party. Stephen Palmquist (Philopsychy Press. who never has possession of or even sees the book. or to attach no value to it at all and surrender it t oge­ ther with the single exemplar of his work. ed. but both now possess certain knowledge. for an alternative translation.” how can this prevent T1 and T2 from using their own knowledge? And even if we say that T1 is somehow “bound” by a contractual copyright notice printed on the book (an untenable view of contract). and a limitation of. thus learning the information in it. 581. and so forth.Journal of Libertarian Studies But third p arties still pose a problem for this theory. 1977). 853 n. John Richardson. T1 . “Are Patents and Copyrights Morally Justified?” p. W. Weischedel (Frankfurt a. how is T2 bound by any contract or reserved right? Rothbard attempts to address this point as follows:
there originally depends the option of the single producer of intellectual work to reserve to himself the power to reproduce. who finds and reads the abandoned book. Neither T1 nor T2 has a contract with A. go on to restrict the exercise of property rights. Even if the book some­ how does not contain within it a “right to reproduce. trans.: Suhrkamp Verlag. For the rights of an author regarding his own thoughts remain to him notwithstand­ ing the reprint. p. translated and quoted in Palmer. as Kant noted: “Those who regard the publication of a book as the exercise of the rights of property in respect of a single copy—it may have come to the possessor as a [manuscript] of the author. unsolicited e-mail. and as there cannot be a distinct permission given to the purchaser of a book for. And. 138. main­ taining the illegality of reproduction—will never attain their end. how much less is a mere presumption sufficient for such a weight of oblig ation?” Im­ manuel Kant. Even if a seller of an object could somehow “reserve” certain use-rights with respect to the sold object. 1994).M. Essay Three: Of the Injustice of Counterfeiting Books. or as a work printed by some prior publisher—and who yet would. Alternatively. he merely learns of the information in the book from gossip. and rev. p. by the reservation of certain rights. 138. its use as pro perty. . “Was ist ein Buch?” in Die Metaphysic die Sitten. “Are Patents and Copyrights Morally Justified?” p.

can be no greater than Green’s. Black. p. Kinsella. First of all. and of the first occupancy homesteading rule as the way to own such things. The Ethics of Liberty. no. it is irrelevant that the mousetrap may not have had a “right to copy” built into it. Further. Nor does he need to have such access in or­ der to duplicate evident features of the mousetrap. Rothbard and others are sidetracked into the mistaken notion that ideas and labor can be owned. Conflict. 1 (1997). If we recognize that ideas cannot be owned (they are not scarce resources). the ownership of the ideas in Black’s head. . Only scarce resources are owned. and there­ fore he too would be a violator of Brown’s pro perty even though he himself had not made the actual contract. no one can acquire a greater property title in something than has already been given away or sold. Calculation. He does not see or have access to ideas in Green’s head. ideas in one’s head are not “owned” any more than la­ bor is owned. . Black merely sees Green’s mousetrap. By losing sight of scarcity as a necessary aspect of a homesteadable thing. that creation is neither nec­ essary nor sufficient for ownership (first occupancy is). For Black does not need such permis­ sion to use his own property as he sees fit. in accordance with his contract with Brown—but only all rights except to sell .N. including action which employs owned scarce means (property).88 Some of this
87 88
Rothbard. 123. he “hap­ pens to see” it). 44. “Knowledge.87
There are several problems with this reasoning.” Review of Aus­ trian Economics 10. and the Use of Property. . Stephan Kinsella – Against Intellectual Property
A common objection runs as follows: all right. How does “happening to see” the mousetrap make Black a trespasser or violator of Brown’s rights? All action. . happens to see Green’s mousetrap and then goes ahead and produces and sells the replica? Why should he be prosecuted? The an­ swer is that . and Law”. it would be criminal for Green [the buyer] to produce and sell the Brown mousetrap. If Black somehow comes into possession of the ideas implicit in an item which Brown invented (in Rothbard’s example. but suppose that someone else. p. who had not made a contract with Brown. a replica. and that labor need not be “owned” in order to be a homesteader. But therefore Black’s title in the mousetrap.
39
. Green did not own the total property right in his mouse­ trap. Judgment. Jörg Guido Hüls ­ mann. “Knowledge. involves the use of technical knowledge. then the trouble caused by these confused notions disappears.

The reservation-of-rights view would reverse this by assuming that every use of property is valid only if that particular use-right can be somehow found or located in the pro­ perty. The neighbors now demand exorbitant prices for their land. we live by right. We do not have to have a “right to copy” as part of a bun­ dle of rights to have a right to impose a known pattern or form on an object we own. Farmer Jed discovers oil under his land. thus spoil­ ing Jed’s plans. I do not have to first find in my property a right-to-use-in-a-certain-way. If I own a 100-acres of land. No one for miles around knows about the black gold. Rather. Cooter spills his guts to Clem and the boys. except those that cause invasions of others’ property borders. Similarly. may they be forced to 40
. not permis­ sion. One of them promptly runs to a pay phone and gives a tip to a re­ porter at the Wall Street Journal (who happens to be his nephew).Journal of Libertarian Studies knowledge may be gained from things we see. sneaks onto Jed’s land and discovers the truth. Contrary to practice in totalitarian societies. it is common knowledge that there is oil in the vicinity. In the middle of the night. We do not need to find permission to take actions with our own property. The question is. his nosy neighbor Cooter. Let us grant that Cooter can be prosecuted for trespass and harms flowing therefrom. Jed plans to buy his neighbors’ property for a song. Soon. Consider the following analogy. my paper. suspicious over Jed’s recent good spirits. all things that are not forbidden are permitted.” but because I own the land and it does not (necessarily) violate the prop­ erty rights of others for me to use my property in this fashion. my word processor—including improving my car’s carburetor or using my ink to print words on my paper. since they don’t know about the oil. I can prance around naked on it. The next morning. unless I have contractually obligated myself to someone else to restrict my actions with respect to my use of this knowledge. provided only that we do not invade others’ pro­ perty borders. they’ll sell it cheap. at Floyd’s barbershop. not because the land is imbued with some “right-to-prance-naked. I am entitled to do what I want with my own property —my car. can Jed’s neighbors be prevent­ ed from acting on their knowledge? That is. for all ways of using it. That is. In libertarianism. including the property of others. We must not lose sight of this crucial libertarian point. too. we have a right to do anything at all with and on our own property. are already encompassed within the general right to use my property.

as a general matter. networks. violate any recognizable property rights of the seller. However. but so long as the acquirer of knowledge does not obtain that knowledge illicitly or in violation of a contract. HansHermann Hoppe.
89
Of course. They must feign ignorance until given permission by Jed. it is not property. Given this view of scarcity. pp. see. e. “The Private Production of Defense. in anarcho-capitalism. Talk of reserving the right to copy is merely a way to avoid the contractual notion that only parties to a contract are bound by it. the neighbors would not be permitted to act upon their knowledge because they obtained it ultimately from Cooter.
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. their use of that knowledge does not. let us exam­ ine the legitimacy of common forms of IP. cannot include this information in their maps.. and contract. and are entitled to use it as they see fit. 27–52. once third parties become aware of the ideas underlying the inven­ tion or literary work. 1 (Winter 1998–1999). Unlike tangible property. They own their land.g. he is free to act upon it. a trespasser who had no “title” to that knowledge. Various enclaves or communities may well require their customers. property. Thus. such as geological surveyors mapping oil deposits. it is difficult to predict what extensive contractual regimes.N. Stephan Kinsella – Against Intellectual Property somehow pretend that they do not know about the oil. they could not have obtained “greater title” to it than Cooter himself had. that according to the reservation-of-rights view. or “citizens” to abide by certain IP-like rules.89 Therefore. Note also that others.” Journal of Liber­ tarian Studies 14. purchasers can be bound by con­ tracts with sellers to not copy or even re-sell the thing. informa­ tion is not ownable. however. Note. It is simply not legitimate to restrict the use to which an owner of property can put it unless that owner has contractually obligated himself or has otherwise acquired the information by a violation of the information-holder’s rights. There is clearly no warrant for the view that reserved rights can somehow prohibit third parties from using knowledge they acquire. and institutions will arise. On anarcho-capitalism. patrons. no. The possessor of a stolen watch may have to return it. This imposed ignorance correlates with the un­ natural scarcity imposed by IP. and sell their land to Jed for what they “would have” sold it when in ignorance? Of course they may not be so forced. in gen­ eral.

For example. and are.
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.90 Trade secret law allows damages to be obtained for. This can be applied against the person who has improperly acquired the trade secret or who divulges the secret contrary to a contractual obligation. and also against others who know that they are obtaining the secret from such a person. from practicing patented methods. Y wants to use the formula it
90
Palmer. Palmer argues that they “emerge” from common law-type rights. 91 UTSA. un­ der patent law. or an injunction to be issued to prevent. thus.
Trade Secrets
Trade secrets are easier to justify than patent or copyright. 292–93. or even re-selling. they are prohibited. such as its secret formula for a soft drink. legitimate. Clearly. “Intellectual Property: A Non-Posnerian Law and Economics Approach. Y. “Restatement of the Third Law—Unfair Competi­ tion: A Brief Summary. These contractual webs can be elaborate. they are free to use it as they see fit. 854–55. even if they independently invent the method or device. the item. third parties who have not contracted with the author are prevented from copying or profiting from the author’s original work. Halligan.” § 40. and Palmer. a novel writer can license his story to a movie studio on the condition that the studio require all movie theaters to require customers to agree not to repro­ duce the plot of the movie. acts of “misappropria­ tion” of a trade secret. sellers of novel devices or literary works can contract with buyers to prevent these buyers from reproducing. Yet. copyright and patent seek to prevent the owners of tangible property—scarce resources—from using their own property as they see fit. § 1. He is subject to an employment agreement obligating him to keep this formula secret. “Are Patents and Copyrights Morally Justified?” pp. The reserved-rights approach does not change this. once third parties not bound by a contract acquire this infor­ mation. He then jumps to X’s competitor. comment d.Journal of Libertarian Studies
Copyright and Patent
As should be apparent.” pp. 91 Suppose employee A of company X has access to X’s trade se­ crets. it would probably be difficult to maintain anything similar to our present patent and copyright laws using contract alone. and so on. using their own property. or from shaping their own property into patented devices. Thus. 280. Under copy­ right law.

If A has already revealed the secret to Y. and 15. 93 Palmer.” “accom­ plice. In the context in which such situations usually arise. are properly held liable for acts of ag­ gression committed by others with whom they conspire. however. or the mafia boss who orders an assassination. §§ 7. That is. where the competi­ tor Y wants the trade secret and knows the defecting employee is in breach of contract.” “concert.
92
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. then Y is an ac­ complice or co-conspirator in the violation of X’s rights.N. just as the driver of the getaway car in a bank robbery. Texas Penal Code. the “owner” of the RothbardBurgers trademark. 280.02 (criminal conspiracy).” “accessory. am hungry for a RothbardBurger. Under current law. I see one of the fake RothbardBurger joints run by the stealthy Lachmannian. Under current law. If Y actively solicits A to do this. Rothbard.” “aid and abet. and I buy a burger. third parties can. More questionable is the in­ junction against Y. “Intellectual Property: A Non-Posnerian Law and Economics Approach.02 (Criminal Responsibility for Conduct of A nother). can pre­ vent the Lachmannian from using the mark RothbardBurgers to sell burgers because it is “confusingly similar” to his own trademark. I. so long as the secret formula has not been made public. e.g. the injunction and damages against A are proper because A is in violation of his contract with X. This is because A has not actually breached his trade secrecy agreement until he reveals trade secrets to Y.” see Black’s Law Dic­ tionary. because Y had no contract with X. as a consumer.93 Suppose some Lachmannian changes the name on his failing hamburger chain from LachmannBurgers to RothbardBurgers. For definitions of “abet. be prevented from using a trade secret obtained from the trade secret thief.. which is already the name of another hamburger chain. see. Thus. it could be argued that the competitor Y is acting in conspiracy with or as an accomplice of employee A to violate the (contractual) rights of trade secret holder X. X can also get an injunction to stop Y from using or pub­ licizing the formula. Stephan Kinsella – Against Intellectual Property learns from A to compete with X. X can get a court order to stop A from revealing the secret to Y.” and “conspiracy. it is likely to mislead consumers as to the true source of the
On responsibility for conduct of another or for conspiracy.92
Trademarks
Palmer also argues that trademark law is legitimate.” p. Clearly. in narrowly defined cases.

In the foregoing example. 864–65. it is the consumers whose rights are violated. of course. I (the consumer) thought I was buying a RothbardBurger.Journal of Libertarian Studies goods purchased. perpetrated by the Lachmannian on me. not trade­ mark users. Just as a trademark holder does not have a right to his mark. those more concerned with liberty. and inventors often seem to take for granted the legitimacy of IP. I should have a right to sue the Lachmannian for fraud and breach of contract (not to mention intentional infliction of emotional distress and misrep­ resentation of praxeological truths). The law. the right to sue trademark pirates. he may be said to convince third parties to take an action within their rights. 831. at most. more novel extensions of trademark. then. “Are Patents and Copyrights Morally Justified?” pp. can­ not be justified. at least in the form of patent and copyright. “Intellectual Property: A Non-Posnerian Law and Econom­ ics Approach. to buy a burger from the Lachmannian instead of Rothbard. not the trademark holder’s. He does not even convince oth­ ers to do this.g. 281. gives a right to the trademark hold­ er against the trademark infringer. cannot be justified.. truth. It is not surprising that IP attorneys.
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. namely. nothing wrong with being the first to acquire a domain name and thereafter selling it to the highest bidder. In my view. The law against cybersquatting is simply based on an economically ignorant opposition to “scalping” and arbitrage. vio­ lates Rothbard’s rights. Moreover. e. but instead got a crummy LachmannBurger with its weird kaleidoscopic sauce. Thus. un­ der libertarianism. neither does he have a right against his mark’s dilution. it is difficult to see how this act of fraud. However.
CONCLUSION
We see. artists. trademark law should give consumers. that a system of property rights in “ideal objects” necessarily requires violation of other individual property rights. then. IP.94 Such a system requires a new homesteading rule which subverts the first­ occupier rule. and rights should not take for granted
94 See Palmer. to use one’s own tangible property as one sees fit. 862.” p. and Palmer. The Lachmannian’s actions do not physi­ cally invade Rothbard’s property. it would appear that. such as rights against trademark dilution or against certain forms of cybersquatting. There is. However.